PSU stocks rally as uncertainty fades on government formation, Cochin Shipyard hits upper circuit

Public sector unit stocks rallied on Thursday after clarity emerged on the BJP-led National Democratic Alliance (NDA) coming back for the third term with Narendra Modi set to take oath on June 8.

The Nifty CPSE index gained over 4% on Thursday morning with shares of Cochin Shipyard hitting the upper circuit at 10%. NBCC rose nearly 8% while other constituents of the index like NLC India, NHPC and BEL rose over 5%. The rally comes a day after PSU stocks took a hit dragged by uncertainty over government formation.

Meanwhile, stocks in the power and railway sector also registered significant gains during the early morning trading session. Shares of REC and PFC rose over 6% each while Power Grid was up 2%. Public sector railway stocks like RVNL rose over 7% while IRFC registered nearly 6% gains on Thursday morning. Railtel Corporation of India was trading over 8% higher as of 10:07 a.m. on Thursday.

Meanwhile, some of the other PSU stocks also joined the rally. Shares of GAIL were trading nearly 7% higher on Thursday morning while NHPC stock was up over 6%.

Meanwhile, foreign institutional investors (FIIs) sold ₹5,656 crore in Indian equities on Wednesday. On Tuesday, the FII selling had hit a record of ₹12,436 crore. So far in June, foreign investors have net sold equities worth ₹11,242 crore. The year 2024 has seen FIIs being net sellers of Indian equities in all months except March.

The benchmark Nifty and the Sensex recorded gains on Thursday morning and are trading close to 0.7% higher at 10:11 a.m. The day will also see the Nifty 50 expiry. The last few days had witnessed reduced participation in the options market, as was reflected in the open interest figures, due to a significant increase in volatility in the backdrop of the election results.